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Special-Order Decision: Qualitative Factors

Lindsey Smith, Inc., has the following cost structure for the upcoming year:

Required:

If an amount is zero, enter "0".

A. What is the expected level of profit? $

B. Should the company accept a special order for 1,000 units at a selling price of $20 if variable marketing expenses associated with the special order are $2 per unit? SelectYesNoItem 2

What will be the incremental profit if the order is accepted? $

C. Suppose that the company received a special order for 3,000 units at a selling price of $19 with no variable marketing expenses. What would be the impact on profit? SelectIncreaseDecreaseItem 4 of $

D. Assume that if the special order were accepted, all the regular customers would be aware of the price paid for the special order. Would that influence your decision? SelectYesNoItem 6

Why?

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Item 7